Budget Restructuring Flies Through Committee; Tobacco Bills Up in Smoke

House committees took up two big ticket items Monday: budget reform and tobacco taxes. Bills that would makeover the process of building the state’s budget passed favorably in the House Appropriations committee. A packed Ways and Means committee did not vote on tobacco taxes; representatives deferred their bills.

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Budget Reform

The economically conservative group of legislators called the Fiscal Hawks moved a package of bills that aim to stabilize the use of one-time funds in the budget.

One bill would change the way the state counts up its funds. If passed, the Revenue Estimating Conference (REC), the group in charge of the tally, would project not only revenue from taxes for the state general fund, but also revenue from dedicated funds.

Currently, the constitution loosely provides that the state budget can only use revenue recognized by the REC. Another bill heard in the committee would shore up that language.

Another would split the budget in two – one budget for discretionary items, another for non-discretionary budget items – if the executive budget cuts spending to higher education or health care.

Rep. Lance Harris, who proposed splitting the budget, was unable to answer questions about how exactly it would work: would the two budgets need to be tied together in some way, so that one couldn’t pass without the other?

“I’m sitting here thinking: can we as an Appropriations Committee amend one end of the other one to reconcile it at this point?” Chairman Jim Fannin wondered. “But if you do, the floor doesn’t have the opportunity.”

“There’s a part of this that’s not simple,” Fannin added, “that certainly leads to confusion. I don’t think that was the intent of the author by any means.”

Rep. Charles ‘Bubba’ Chaney wanted to know how the legislative system could keep the budgets balanced with one another as separate instruments.

If money needs to be moved from one side of the budget to the other, would that be possible?

“Is that something we can do on the fly and have staff confident in the numbers we end up with?” Chaney asked. “It’s going to be extremely difficult on the floor, on the fly, the way I see it.”

Harris said he doesn’t anticipate the process of passing these budget bills to be any more difficult than the current one.

“We vote on amendments up or down,” Harris said. “I could see problems with somebody trying to block passage of the bill, but those kinds of things can occur now.”

Tobacco Tax Increase Flops

All four bills seeking to increase taxes on tobacco products in the state have been voluntarily tabled amid legislative opposition to raising taxes.

Rep. Harold Richie’s bill was the only measure argued Monday before the House Ways and Means Committee. It would have raised cigarette taxes from $0.36 to $1.41 per pack, among other tax increases on cigars and both smoking and smokeless tobacco. But after testimony concluded, Richie pulled the bill before a vote saying he knew he did not have enough support to advance the measure to the full House.

Rep. Kirk Talbot’s bill, which sought to increase taxes on cigarettes from $0.36 to $0.60, and two similar measures by Rep. Katrina Jackson were also deferred voluntarily.

Gov. Bobby Jindal has said he will veto any tax hike that is not offset with tax reductions elsewhere.

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A bill containing minor change to the state’s Enterprise Zone program failed to pass in the House Thursday.

The Enterprise Zone is an incentive program that works to encourage businesses to expand in rural parts of the state. The bill would have changed the definition of a “multifamily residential housing”, making bigger apartment complexes eligible for a tax credit.

After the legislature tabled all tax repeal bills, the Louisiana Legislative Black Caucus ditched the parts of its tax package that would cut taxes. But it’s keeping the part that raises revenue.

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Representative Katrina Jackson leads the caucus. She says under her plan, the funds from raising the tobacco tax would be dedicated. “It starts making the areas of higher education systems whole, and the area of health care as well,” Jackson said.